Current Report — Form 8-K — Sect. 13 / 15(d) – SEA’34 Filing Table of Contents
Document/ExhibitDescriptionPagesSize 1: 8-K Current Report HTML 23K
2: EX-10.1 Loan and Security Agreement, Dated as of January HTML 23K
13, 2020, and Effective on January 16, 2020, by
and Between Silicon Valley Bank and Aehr Test
Systems.
(Registrant’s
telephone number, including area code)
N/A
(Former
name or former address, if changed since last report)
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the appropriate box below if the Form 8-K filing is intended to
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Indicate by check
mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 (§230.405 of
this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
(§240.12b-2 of this chapter).
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emerging growth company, indicate by check mark if the registrant
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Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
Trading
Name of
each exchange on which registered
Symbol(s)
Common
Stock
AEHR
The
NASDAQ Capital Market
Item 1.01. Entry into a Material Definitive Agreement.
On January 16, 2020, Aehr Test Systems (the “Company”)
entered into a Loan and Security Agreement (the “Loan
Agreement”) with Silicon Valley Bank (the
“Bank”). Pursuant to the Loan Agreement and subject to
the deduction of reserves that are determined by the Bank in its
good faith business judgment, the Company may borrow up to (a) the
lesser of (i) the revolving line of $4.0 million or (ii) the amount
available under the borrowing base minus (b) the outstanding
principal balance of any advances, under a revolving line of
credit. The borrowing base is 80% of eligible accounts, as
determined by the Bank from the Company’s most recent
borrowing base statement; provided, however, that the Bank has the
right to decrease the foregoing percentage in its good faith
business judgment to mitigate the impact of certain events or
conditions, which may adversely affect the collateral or its
value.
Subject to an event of default, the principal amount outstanding
under the revolving line of credit will accrue interest at a
floating per annum rate equal to the greater of (a) the prime rate
plus an additional percentage of up to 1%, which additional
percentage depends on the Company’s adjusted quick ratio, and
(b) 4.75%. Interest is payable monthly on the last calendar day of
each month and the outstanding principal amount, the unpaid
interest and all other obligations are due on the maturity date of
January 11, 2021, which is 364 days from the effective date of
January 13, 2020.
The Loan Agreement contains customary representations, warranties
and covenants, including, among other things, covenants limiting
the Company’s ability to transfer all or any part of its
business or property, engage in any business other than the
businesses in which the Company is currently engaged, liquidate or
dissolve, permit any change in control without the Bank’s
prior written consent, merge or consolidate, make an acquisition,
incur or assume any indebtedness, incur any liens on any of its
property, maintain any collateral account, pay any dividends or
make any distribution, make any investment, enter into any material
transaction with any affiliate of the Company, make or permit any
payment on any subordinated debt or become an investment company
under the Investment Company Act of 1940, as amended, in each case,
subject to customary exceptions for a revolving line of credit of
this size and type.
The Loan Agreement contains customary events of default for a
revolving line of credit of this size and type that entitle the
Bank to, among other things, declare all obligations immediately
due and payable, stop advancing money or extending credit, demand
that the Company deposit with the Bank a certain amount of cash
with respect to the aggregate face amount of all letters of credit
remaining undrawn and pay in advance all scheduled letter of credit
fees and increase the applicable interest rate by an additional
5.00% per annum above the applicable interest rate.
The events of default include, among others, the Company’s
breach of its payment obligations or covenants, events constituting
a material adverse change, restraints on the Company’s assets
or business, bankruptcy and insolvency defaults, including the
commencement of insolvency proceedings, cross-defaults to other
agreements, material judgment defaults and inaccuracy of
representation or warranty defaults.
To secure the obligations under the Loan Agreement, the Company
granted to the Bank a first priority security interest in
substantially all of the assets of the Company, excluding its
intellectual property, subject to a negative pledge against
encumbering such intellectual property.
The foregoing description of the Loan Agreement does not purport to
be complete and is qualified in its entirety by reference to the
full text of the Loan Agreement, a copy of which is attached hereto
as Exhibit 10.1 and is incorporated herein by
reference.
Item 2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The information disclosed in Item 1.01 above is incorporated herein
by reference.
Loan
and Security Agreement, dated as of January 13, 2020, and effective
on January 16, 2020, by and between Silicon Valley Bank and Aehr
Test Systems.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
